EMI's UK chief parted company with the troubled record label yesterday in the first stage of a wholesale shake-up by its venture capital owners, becoming the latest victim of the turmoil that has gripped the industry in recent years.

Tony Wadsworth, chairman and chief executive of EMI Music UK & Ireland since 2002, was closely identified with some of its biggest-selling artists including Coldplay, Robbie Williams and Damon Albarn of Gorillaz and Blur.

After 25 years at EMI, he stepped down ahead of an expected restructure, which is likely to spell the loss of other long-serving executives, as Terra Firma's chief, Guy Hands, races to transform the business.

Roger Ames, head of EMI in North America, will take responsibility for A&R in the UK and Ireland, while Mike Clasper, the former BAA chief executive who sits on Terra Firma's board, will assume Wadsworth's other responsibilities.

Hands is expected to announce his strategy for EMI this month, as well as appointing a new chief executive to replace Eric Nicoli, who left in August ahead of the completion of Terra Firma's £2.4bn takeover. He has complained of profligacy in several areas, including over-generous advances for artists, and claimed some stars were not working hard enough.

"The industry, rather than embracing digitalisation and the opportunities it brings for promotion and distribution...has stuck its head in the sand," he said in an email to staff.

Like its rivals, EMI was hit by the impact of digital piracy at the turn of the century and failed to move quickly to take advantage of new revenue streams in live music, which is booming, and merchandising.

While digital sales are now rising, they are not doing so fast enough to make up for the global fall in CD sales. The label was also damaged by an underwhelming 2007 release schedule and has been hit by defections of artists including Radiohead and Paul McCartney.

The former Beatle signed a deal to sell his music through Starbucks coffee shops and complained EMI had become "really very boring". Radiohead released their recent album, In Rainbows, via a download and allowed fans to pay what they liked. Rather than re-signing with EMI for the conventional release that followed, they signed with independent label XL.

The group's singer, Thom Yorke, accused EMI's new management of acting like a "confused bull in a china shop".

"What we wanted was some control over our work and how it was used in the future by them - that seemed reasonable to us," he said. "Mr Hands was not interested. So neither were we."

Coldplay, who will this year release their fourth album of a five-album deal, could be next to consider their future.

Hands is convinced he can dramatically cut costs at EMI while boosting profits with new revenue streams and remodelling its relationships with artists. Shortly after buying the company, he said EMI was a "classic example" of Terra Firma's strategy to "look for the worst businesses we can find in the most challenging sector".

Terra Firma is clamping down on costs by limiting new signings and spending on marketing. It is expected to cut jobs.

Paul Williams, editor of the industry magazine Music Week, said Wadsworth's departure was a "sad loss" for the UK music industry. "Tony Wadsworth is somebody who is very, very well liked by the artist community and they see him as a decent, honest bloke. So anyone else coming in, particularly somebody from outside the music industry, has got to establish a trusting relationship and obviously that is not there at the moment."